Syriza prepares to make a deal with the EU

By
Christoph Dreier
11 February 2015

Following the sharp negative reaction of financial markets and European governments to newly elected Prime Minister Alexis Tsipras’ speech to the Greek parliament last week, in which he repeated some of his campaign promises, Tsipras and his finance and foreign ministers have rushed to reassure the banks and the European Union that the Syriza-led government will not reverse previous cuts in social services or end Greece’s cooperation with the EU.

Tsipras’ cautious announcement of a staggered reversal of his predecessor’s cut in the minimum wage and other vague promises were sufficient to prompt an outcry from the media about his “confrontation course.”

The opposite is the case. Finance Minister Yanis Varoufakis told CNN that a planned reinstatement of laid-off state employees would apply to “just one tiny little miserable percent of those who lost their jobs.” He added that “whatever criticisms one may have of the euro zone, once you are in it you should stick with it.”

Now the government has drawn up a 10-point plan to present to euro zone finance ministers, who are meeting today in Brussels. The plan aims to partially replace previous debt agreements and provide security for the Greek federal budget over the next six months.

According to accounts in Greek newspapers, the plan is not substantially different from the austerity regime previously imposed on Greece by the European Union. The so-called “bridge agreement” would reportedly leave untouched 70 percent of the previous memorandums between the Greek government and the “troika” (the EU, the International Monetary Fund and the European Central Bank).

In place of the remaining 30 percent of debt agreements, Syriza would pledge to carry out 10 reforms, the specific content of which remains unknown. They would be implemented under an agreement with the Organization for Economic Cooperation and Development (OECD).

In return for continuing to adhere to most of the debt memorandums, the new Greek government hopes to receive the last tranche of EU assistance, well over €7 billion, as well as the profits the European Central Bank has made on Greek state loans. In addition, the Syriza-led government is calling for a reduction in the required primary budget surplus for 2015 from 3 percent to 1.5 percent.

With this money, Tsipras’ government wants to guarantee the repayment of state bonds through June. Starting in July, much higher payments will become due. The total Greek state debt amounts to €320 billion.

An extension of the previous debt memorandum had already been proposed by the previous government, headed by the New Democracy’s Antonis Samaras.

In proposing the so-called “bridge” agreement, Syriza has made clear that it will do everything it can to guarantee payments to the banks and creditors and satisfy the EU finance ministers.

There are reports that the government’s proposal includes the retention of an oversight body to monitor the Greek budget. The old “troika,” deeply despised by the majority of Greeks, would be replaced with a new body that would meet outside of Greece.

Thus far, EU representatives have rejected the Greek government’s proposals. A spokesperson for the EU Commission said Tuesday that there was a great deal of contact between Brussels and Athens. However, no agreement had been reached.

Nor did the European Commission expect an agreement on Wednesday or at a meeting the following Monday. German Finance Minister Wolfgang Schäuble said, “I do not yet understand how the Greek government intends to manage it.”

Syriza’s acceptance of large parts of the debt memorandum is of a piece with its support for the aggressive foreign policy of the EU. The new Greek foreign minister, Nikos Kotzias, a former functionary of the Stalinist Communist Party of Greece (KKE) who is politically close to Syriza, made clear his attitude to questions of foreign policy in an interview with Spiegel Online. In the interview, Kotzias declared his support for the provocative policy of the EU toward Russia.

Kotzias said the secession of Crimea from Ukraine and its incorporation into the Russian Federation, which followed last February’s fascist-led putsch and installation of a pro-US, pro-EU government in Kiev, was illegal. He defended EU sanctions against Russia. “Sanctions when necessary, yes,” said Kotzias.

One of the new Greek government’s first official acts was to register its support for an intensification of the sanctions imposed by the US and the European imperialist powers.

Kotzias went on to say that it was necessary to keep an eye on the stability of the region. “Greece sits in the middle of a triangle,” he said. “Ukraine is above, to the left is Libya, and to the right is the Middle East, only 300 kilometers from us. All areas are destabilized.”

He said his government wanted to use its influence on nations such as China, India and Russia to protect the interests of the EU. “We want there to be a bridge… that has its foundation in the European Union,” he told Spiegel Online.

Kotzias met with German Foreign Minister Frank-Walter Steinmeier on Tuesday. On Wednesday, he traveled to Moscow to meet with his Russian counterpart, Sergei Lavrov.